Standard Chartered and OKX Launch Tokenized Collateral Program to Boost Institutional Crypto Use
Key Takeaways:
- Standard Chartered and OKX launched a pilot program allowing institutional clients to use crypto and tokenized money market funds (MMFs) as off-exchange collateral.
- The initiative, conducted under Dubai’s virtual asset regulatory framework, aims to enhance capital efficiency and counterparty risk protection.
- Asset manager Franklin Templeton and Brevan Howard Digital are among the first participants in the groundbreaking program.
Standard Chartered and cryptocurrency exchange OKX have formally started a pilot collateral mirroring program allowing organizations to utilize tokenized money market assets and cryptocurrencies as collateral for trading goals. Under the Dubai Virtual Asset Regulatory Authority (VARA) framework, the project is being implemented as a major step toward including digital assets into conventional institutional finance.
The program improves both confidence and operational efficiency in the changing crypto asset ecosystem by providing a safe, compliant way of deploying off-exchange collateral via a globally systemically important bank (G-SIB).
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Institutional Integration of Tokenized Collateral
The program introduces a framework where digital assets—namely cryptocurrencies and tokenized MMFs—can be mirrored as collateral without being physically transferred to exchanges. Standard Chartered will serve as the regulated custodian under the DIFC jurisdiction, ensuring asset safety and regulatory compliance. OKX, through its VARA-licensed entity, will manage the trading operations and facilitate transactions.
“The cooperation establishes an industry standard for institutions to use trading capital at scale by using Standard Chartered’s position as a top custodian worldwide and OKX’s market leadership in cryptocurrency trading,” said Hong Fang, President of OKX.
Franklin Templeton, a prominent asset manager in the digital asset space, is one of the first institutions to onboard. Through the collaboration, OKX clients will access on-chain assets developed by Franklin Templeton’s Digital Assets Team.
Why This Is Important Going Forward for Institutional Crypto
The addition of tokenized MMFs as collateral is not only a technical improvement; it also indicates a more general movement toward the normalization of crypto assets in conventional banking. In this evolution, Margaret Harwood-Jones, Global Head of Financing and Securities Services at Standard Chartered, underlined the need of safe custody solutions and regulatory certainty.
“Our partnership with OKX to allow the use of tokenized MMFs and cryptocurrencies as collateral marks a major advancement in giving institutional clients the confidence and efficiency they require,” she stated.
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The Dubai Advantage: Regulatory Clarity Meets Innovation
Launching the pilot within Dubai’s VARA framework is a strategic decision. Allowing innovation to continue under defined legal boundaries, VARA has emerged as one of the most forward-looking crypto regulators in the world. This gives institutional players the legal clarity and infrastructure they need to enter or grow their footprint in the digital asset market.
By choosing Dubai as the base for the pilot, Standard Chartered and OKX are aligning themselves with a jurisdiction that actively fosters crypto innovation through robust but enabling regulation.
What Comes Next
Franklin Templeton will be the first in a series of tokenized MMFs offered under the program. More institutions are expected to onboard in the coming months, with further tokenized assets added to the roster. Should the pilot be successful, it might open the door for a new industry standard in crypto-financial infrastructure—where blockchain assets are frequently used as secure, compliant collateral across global markets.
This project might greatly increase the extent of institutional crypto involvement and strengthen the integration between conventional finance and blockchain-based assets if important institutional players keep participating and a G-SIB custodian supports it.
